<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
- --------- EXCHANGE ACT OF 1934.
For the quarterly period ended: August 1, 1998
--------------
- OR -
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
- -------- EXCHANGE ACT OF 1934.
For the transaction period from _________ to ________
COMMISSION FILE NUMBER 000-20969
HIBBETT SPORTING GOODS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 63-1074067
--------- ----------
(State or other jurisdiction of (IRS Employee Identification No.)
incorporation or organization)
451 INDUSTRIAL LANE, BIRMINGHAM, ALABAMA 35211
---------------------------------------- -----
(Address of principal executive offices) (Zip code)
(205)-942-4292
--------------
(Registrant's telephone number including area code)
NONE
----
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--------- ---------
Indicate the number of shares outstanding of each of the issuer's common stock,
as of the latest practicable date: Shares of common stock, par value $.01 per
share, outstanding as of August 1, 1998 were 6,405,816 shares.
<PAGE>
HIBBETT SPORTING GOODS, INC.
<TABLE>
<CAPTION>
INDEX
PAGE NO.
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<S> <C>
Condensed Consolidated Balance Sheets at
August 1, 1998 and January 31, 1998 2
Condensed Consolidated Statements of Operations for the Thirteen Week
and Twenty-Six Week Periods Ended August 1, 1998 and August 2, 1997 3
Condensed Consolidated Statements of Cash Flows for the
Twenty-Six Week Periods Ended August 1, 1998 and August 2, 1997 4
Notes to Condensed Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6-10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
Item 3. Defaults Upon Senior Securities 10
Item 4. Submission of Matters to Vote of Security-Holders 10
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
</TABLE>
1
<PAGE>
HIBBETT SPORTING GOODS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)
<TABLE>
<CAPTION>
AUGUST 1, 1998 JANUARY 31, 1998
-------------- ----------------
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 343 $ 4,498
Accounts receivable, net 1,890 1,839
Inventories 46,231 33,267
Prepaid expenses and other 1,669 650
Deferred income taxes 702 606
-------- --------
Total current assets 50,835 40,860
-------- --------
Property and equipment, net 14,627 12,115
-------- --------
Noncurrent Assets:
Deferred income taxes 386 364
Other, net 157 27
-------- --------
Total noncurrent assets 543 391
-------- --------
Total Assets $ 66,005 $ 53,366
======== ========
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
Accounts payable $ 18,834 $ 10,951
Accrued income taxes 961 860
Accrued expenses:
Payroll-related 1,937 1,813
Other 1,800 1,587
-------- --------
Total current liabilities 23,532 15,211
-------- --------
Long-Term Debt 1,046 -
-------- --------
Stockholders' Investment:
Preferred stock, $.01 par value 1,000,000 shares
authorized, no shares outstanding - -
Common stock, $.01 par value, 12,000,000 shares
authorized, 6,405,816 shares issued and
outstanding at August 1, 1998 and 6,393,977
shares issued and outstanding at January 31, 1998 64 64
Paid-in capital 53,743 53,681
Retained earnings (deficit) (12,380) (15,590)
-------- --------
Total stockholders' investment 41,427 38,155
-------- --------
Total Liabilities and Stockholders' Investment $ 66,005 $ 53,366
======== ========
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
2
<PAGE>
HIBBETT SPORTING GOODS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars In Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
------------------------------- -------------------------------
AUGUST 1, 1998 AUGUST 2, 1997 AUGUST 1, 1998 AUGUST 2, 1997
-------------- -------------- -------------- --------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net sales $32,524 $26,393 $65,845 $52,558
Cost of goods sold,
(Including warehouse, distribution
and store occupancy costs) 22,907 18,555 46,065 36,681
--------- --------- --------- ---------
Gross profit 9,617 7,838 19,780 15,877
Store operating, selling, and
administrative expenses 6,701 5,671 13,220 10,912
Depreciation and amortization 731 556 1,411 1,073
--------- --------- --------- ---------
Operating income 2,185 1,611 5,149 3,892
Interest expense (income), net (5) 14 (50) (11)
--------- --------- --------- ---------
Income before provision for income taxes 2,190 1,597 5,199 3,903
Provision for income taxes 838 611 1,989 1,493
--------- --------- --------- ---------
Net income $ 1,352 $ 986 $ 3,210 $ 2,410
========= ========= ========= =========
Earnings per common share:
Basic:
Net income $ 0.21 $ 0.16 $ 0.50 $ 0.39
========= ========= ========= =========
Diluted:
Net income $ 0.21 $ 0.16 $ 0.49 $ 0.38
========= ========= ========= =========
Weighted average shares outstanding:
Basic 6,402,950 6,167,273 6,398,732 6,150,767
========= ========= ========= =========
Diluted 6,587,518 6,279,770 6,569,521 6,264,084
========= ========= ========= =========
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE>
HIBBETT SPORTING GOODS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars In Thousands)
<TABLE>
<CAPTION>
TWENTY-SIX WEEKS ENDED
------------------------------
AUGUST 1, 1998 AUGUST 2, 1997
-------------- --------------
(Unaudited) (Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,210 $ 2,410
------- -------
Adjustments to reconcile net income to net
cash (used in) operating activities:
Depreciation and amortization 1,411 1,073
Deferred income taxes (118) (115)
Loss on disposal of assets 18 7
Change in assets and liabilities (5,858) (4,005)
------- -------
Total adjustments (4,547) (3,040)
------- -------
Net cash (used in) operating activities (1,337) (630)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (3,929) (1,680)
Proceeds from sale of property 3 5
------- -------
Net cash (used in) investing activities (3,926) (1,675)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt - -
Proceeds from options exercised and purchase
of shares under employee stock purchase plan 62 405
Revolving loan borrowings and repayments, net 1,046 704
------- -------
Net cash provided by financing activities 1,108 1,109
------- -------
NET (DECREASE) IN CASH AND CASH EQUIVALENTS (4,155) (1,196)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 4,498 2,269
------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 343 $ 1,073
======= =======
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
HIBBETT SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of
Hibbett Sporting Goods, Inc. and its wholly-owned subsidiaries (the "Company")
have been prepared in accordance with generally accepted accounting principles
for interim financial information and are presented in accordance with the
requirements of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. These
financial statements should be read in conjunction with the consolidated
financial statements and notes thereto for the fiscal year ended January 31,
1998. In the opinion of management, the condensed consolidated financial
statements included herein contain all adjustments (consisting only of normal
recurring adjustments) considered necessary for a fair presentation of the
Company's financial position as of August 1, 1998 and August 2, 1997, and
the results of its operations and cash flows for the periods presented.
The Company has experienced and expects to continue to experience seasonal
fluctuations in its net sales and operating income. Therefore, the results of
the interim periods presented herein are not necessarily indicative of the
results to be expected for any other interim period or the full year.
2. EARNINGS PER SHARE
The Company adopted Statement of Financial Accounting Standards ("SFAS")
No. 128, Earnings per Share, effective January 31, 1998, and restated earnings
per share ("EPS") for all periods presented in the consolidated statements of
operations. A reconciliation of the weighted average shares for basic and
diluted EPS is as follows:
<TABLE>
<CAPTION>
THIRTEEN WEEK PERIOD ENDED TWENTY-SIX WEEK PERIOD ENDED
------------------------------------ -------------------------------------
AUGUST 1, 1998 AUGUST 2, 1997 AUGUST 1, 1998 AUGUST 2, 1997
--------------- ----------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Weighted average shares outstanding:
Weighted average shares, excluding the
effect of stock options 6,402,950 6,167,273 6,398,732 6,150,767
Effect of stock options 184,568 112,497 170,789 113,317
--------------- ----------------- ---------------- ----------------
Weighted average shares, including the
effect of stock options 6,587,518 6,279,770 6,569,521 6,264,084
=============== ================= ================ ================
</TABLE>
3. CONTINGENCIES
The Company is a party to various legal proceedings incidental to its
business. In the opinion of management, after consultation with legal counsel,
the ultimate liability, if any, with respect to those proceedings is not
presently expected to materially affect the financial position or results of
operations of the Company.
5
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Hibbett Sporting Goods, Inc. ("Hibbett" or the "Company") is a rapidly-
growing operator of full-line sporting goods stores in small to mid-sized
markets in the southeastern United States. Hibbett's stores offer a broad
assortment of high quality athletic equipment, footwear, and apparel at
competitive prices with superior customer service. The Company's merchandise
assortment features a core selection of brand name merchandise emphasizing team
and individual sports complemented by a selection of localized apparel and
accessories designed to appeal to a wide range of customers within each market.
The Company believes that its stores are among the primary retail distribution
alternatives for brand name vendors that seek to reach Hibbett's target markets.
The Company operates 140 Hibbett Sports stores as well as eleven smaller-
format Sports Addition athletic shoe stores and four larger-format Sports & Co.
superstores. Hibbett's primary retail format and growth vehicle is Hibbett
Sports, a 5,000 square foot store located primarily in enclosed malls as well as
dominant strip centers. Although competitors in some markets may carry product
lines and national brands similar to Hibbett, the Company believes that its
Hibbett Sports stores are typically the primary, full-line sporting goods
retailers in their markets due to, among other factors, the extensive selection
of traditional team and individual sports merchandise offered and a high level
of customer service.
The Company operates on a 52 or 53 week fiscal year ending on the Saturday
nearest to January 31 of each year. Hibbett is incorporated under the laws of
the state of Delaware.
RESULTS OF OPERATIONS
The following table sets forth statement of operations items expressed as a
percentage of net sales for the periods indicated.
<TABLE>
<CAPTION>
THIRTEEN WEEK TWENTY-SIX WEEK
PERIOD ENDED PERIOD ENDED
------------------------------------- ---------------------------------------
August 1, 1998 August 2, 1997 August 1, 1998 August 2, 1997
---------------- ------------------ ------------------ -------------------
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of goods sold, including warehouse,
distribution and store occupancy costs 70.4 70.3 70.0 69.8
---------------- ------------------ ----------------- -------------------
Gross profit 29.6 29.7 30.0 30.2
Store operating, selling, and
administrative expenses 20.6 21.5 20.1 20.8
Depreciation and amortization 2.3 2.1 2.1 2.0
---------------- ------------------ ----------------- -------------------
Operating income 6.7 6.1 7.8 7.4
Interest expense (income), net 0.0 0.1 (0.1) 0.0
---------------- ------------------ ----------------- -------------------
Income before provision for income taxes 6.7 6.0 7.9 7.4
Provision for income taxes 2.6 2.3 3.0 2.8
---------------- ------------------ ----------------- -------------------
Net income 4.1% 3.7% 4.9% 4.6%
================ ================== ================= ===================
</TABLE>
6
<PAGE>
THIRTEEN WEEKS ENDED AUGUST 1, 1998 COMPARED TO THIRTEEN WEEKS ENDED
AUGUST 2, 1997
Net sales. Net sales increased $6.1 million, or 23.2%, to $32.5 million for
the thirteen weeks ended August 1, 1998, from $26.4 million for the comparable
period in the prior year. This increase is attributed to opening a net of forty-
seven Hibbett Sports stores and two Sports Additions store in the last 52 week
period ended August 1, 1998, and a 2.7% increase in comparable store net sales.
The increase in comparable net sales was due primarily to increased equipment
and footwear sales. New stores and stores not in the comparable store net sales
calculation accounted for $5.5 million of the increase in net sales and
increases in comparable store net sales contributed $563,000. Comparable store
net sales data for a period reflect stores open throughout that period and the
corresponding period of the prior fiscal year. Comparable store net sales do not
include sales by the Company's four larger format Sports & Co. superstores or
the Company's wholly-owned subsidiary, Hibbett Team Sales, Inc.
During the thirteen weeks ended August 1, 1998, the Company opened eighteen
Hibbett Sports stores and two Sports Additions stores. The Company acquired two
of the stores from W.C. Bradley Company and five of the stores from Olympia
Sports. Five of the seven stores acquired have been converted to Hibbett Sports
stores and two have been converted to Sports Additions stores.
Gross profit. Cost of goods sold includes the cost of inventory, occupancy
costs for stores and occupancy and operating costs for the distribution center.
Gross profit was $9.6 million, or 29.6% of net sales, in the thirteen weeks
ended August 1, 1998, as compared to $7.8 million, or 29.7% of net sales, in the
same period of the prior fiscal year. The decrease in gross profit as a
percentage of net sales in the thirteen weeks ended August 1, 1998 was due
primarily to higher store occupancy costs as a percentage of net sales as a
result of the increased number of new stores in the store base.
Store operating, selling and administrative expenses. Store operating,
selling and administrative expenses were $6.7 million, or 20.6% of net sales,
for the thirteen weeks ended August 1, 1998, as compared to $5.7 million, or
21.5% of net sales, for the comparable period a year ago. The decrease in store
operating, selling and administrative expenses as a percentage of net sales in
the thirteen weeks ended August 1, 1998 is primarily attributable to improved
leveraging of administrative costs over higher sales.
Depreciation and amortization. Depreciation and amortization as a percentage
of net sales increased slightly to 2.3% in the thirteen weeks ended August 1,
1998 from 2.1% in the thirteen weeks ended August 2, 1997 due to the increased
number of new stores in the store base.
Interest expense (income), net. Net interest income for the thirteen weeks
ended August 1, 1998 was $5,000 compared to net interest expense of $14,000 in
the prior year period. The increase is attributable to income earned on higher
levels of temporary cash investments.
TWENTY-SIX WEEKS ENDED AUGUST 1, 1998 COMPARED TO TWENTY-SIX WEEKS ENDED
AUGUST 2, 1997
Net sales. Net sales increased $13.3 million, or 25.3%, to $65.9 million for
the twenty-six weeks ended August 1, 1998, from $52.6 million for the comparable
period in the prior year. This increase is attributed to opening a net of
forty-seven Hibbett Sports stores and two Sports Additions store in the last 52
week period ended August 1, 1998, and a 4.5% increase in comparable store net
sales. The increase in comparable net sales was due primarily to increased
equipment and footwear sales. During the twenty-six weeks ended August 1, 1998,
the Company opened thirty-three Hibbett Sports stores and two Sports Additions
stores. New stores and stores not in the comparable store net sales calculation
accounted for $11.5 million of the increase in net sales and increases in
comparable store net sales contributed $1.8 million. Comparable store net sales
data for a period reflect stores open throughout that period and the
corresponding period of the prior fiscal year. Comparable store net sales do not
include sales by the Company's four larger format Sports & Co. superstores or
the Company's wholly-owned subsidiary, Hibbett Team Sales, Inc.
Gross profit. Cost of goods sold includes the cost of inventory, occupancy
costs for stores and occupancy and operating costs for the distribution center.
Gross profit was $19.8 million, or 30.0% of net sales, in the twenty-six weeks
ended August 1, 1998, as compared to $15.9 million, or 30.2% of net sales, in
the same period of the prior fiscal year. The
7
<PAGE>
decrease in gross profit as a percentage of net sales in the twenty-six weeks
ended August 1, 1998 was due primarily to higher store occupancy costs as a
percentage of net sales as a result of the increased number of new stores in the
store base.
Store operating, selling and administrative expenses. Store operating,
selling and administrative expenses were $13.2 million, or 20.1% of net sales,
for the twenty-six weeks ended August 1, 1998, as compared to $10.9 million, or
20.8% of net sales, for the comparable period a year ago. The decrease in store
operating, selling and administrative expenses as a percentage of net sales in
the twenty-six weeks ended August 1, 1998 is primarily attributable to improved
leveraging of administrative costs over higher sales.
Depreciation and amortization. Depreciation and amortization as a percentage
of net sales increased slightly to 2.1% in the twenty-six weeks ended August 1,
1998 from 2.0% in the twenty-six weeks ended August 2, 1997.
Interest expense (income), net. Net interest income for the twenty-six weeks
ended August 1, 1998 was $50,000 compared to net interest income of $11,000 in
the prior year period. The increase is attributable to income earned on higher
levels of temporary cash investments.
LIQUIDITY AND CAPITAL RESOURCES
The Company's capital requirements relate primarily to new store openings and
working capital requirements. The Company's working capital needs are somewhat
seasonal in nature and typically reach their peak near the end of the third and
the beginning of the fourth quarter of its fiscal year. Historically, the
Company has funded its cash requirements primarily through cash flows from
operations and borrowings under its revolving loan facilities.
Net cash provided by (used in) operating activities has historically been
driven by net income levels combined with fluctuations in inventory and accounts
payable balances. The Company has continued to increase inventory levels in the
twenty-six weeks ended August 1, 1998 as the number of new stores has increased.
The Company has financed this increase through increased net income and accounts
payable balances as well as borrowings under a Revolving Credit Facility. Net
cash used in operating activities was $1.3 million for the twenty-six week
period ending August 1, 1998 as compared to net cash used in operating
activities of $630,000 for the twenty-six week period ending August 2, 1997.
With respect to cash flows from investing activities, capital expenditures
were $3.9 million in the twenty-six week period ended August 1, 1998 compared to
$1.7 million for the prior year period. Capital expenditures in the twenty-six
weeks ended August 1, 1998 primarily related to the opening of thirty-five new
stores, construction costs incurred on stores not yet open, and distribution
center-related expenditures. The increase in capital expenditures in the current
year period resulted from additional new store activity and new distribution
center equipment.
Net cash provided by financing activities was $1.1 million in both twenty-six
week periods ending August 1, 1998 and August 2, 1997. These financing
activities were the result of borrowings against the revolving credit facility,
purchases of shares under the employee stock purchase plan and the exercise of
stock options.
The Company estimates capital expenditures in fiscal 1999 to be approximately
$6.5 million which includes resources budgeted to (i) fund the opening of
approximately 48 Hibbett Sports stores, (ii) remodel selected existing stores
and (iii) fund headquarters and distribution center-related capital
expenditures.
The Company maintains an unsecured $20 million Revolving Credit Facility (the
"Facility"). Borrowings under the Facility bear interest at the Company's
option either at a base rate, a quoted cost of funds rate, or a LIBOR based
rate. As of August 1, 1998, there was $1,046,000 outstanding under the Facility
which expires October 31,1999. Based on its current operating and store opening
plans, the Company believes that it can fund its cash needs for the foreseeable
future through borrowings under the Facility and cash generated from operations.
8
<PAGE>
NEW ACCOUNTING PRONOUNCEMENTS
In June 1997, the Financial Accounting Standards Board ("FASB"), issued SFAS
No. 130, Reporting Comprehensive Income, which establishes standards for
reporting and display of "comprehensive income" which is the total of net income
and all other non-owner changes in stockholders' equity and its components.
This standard was adopted on February 1, 1998 and did not have a significant
impact on the Company's financial reporting.
In June 1997, the FASB issued SFAS No. 131, Disclosures about Segments of
an Enterprise and Related Information. SFAS No. 131, which supersedes SFAS Nos.
14, 18, 24 and 30, establishes new standards for segment reporting, using the
"management approach," in which reportable segments are based on the same
criteria on which management disaggregates a business for making operating
decisions and assessing performance. The Company will adopt the standard in
fiscal 1999. The new rules are not expected to have a significant impact on the
Company's financial reporting.
In February 1998, the FASB issued SFAS No. 132, Employers' Disclosures about
Pensions and Other Post-retirement Benefits. SFAS No. 132, which supersedes
SFAS Nos. 87, 88, and 106, standardizes the disclosure requirements for pensions
and other post-retirement benefits to the extent practicable, requires
additional information on changes in the benefit obligations and fair values of
plan assets that will facilitate financial analysis, and eliminates certain
disclosures that are no longer as useful as they were when SFAS Nos. 87, 88, and
106, were issued. The Company does not offer pensions or other post-retirement
benefits. Therefore, the standard will not have an impact on the Company's
financial reporting.
The American Institute of Certified Public Accountants ("AICPA"), has issued
Statement of Position ("SOP"), 98-1, Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use. This statement requires
capitalization of external direct costs of materials and services, payroll and
payroll related costs for employees directly associated, and interest cost
during development of computer software for internal use. Planning and
preliminary costs should be amortized on a straight-line basis unless another
systematic and rational basis is more representative of the software's use.
This statement is not expected to have a material effect on the Company's
financial reporting.
The AICPA has issued SOP 98-5, Reporting on the Costs of Start-up Activities.
This statement provides guidance on the financial reporting of start-up costs
and organization costs, and requires these costs to be expensed as incurred.
The new rules which are effective the fiscal year beginning after December 15,
1998, are not expected to have a significant impact on the Company's financial
reporting.
YEAR 2000 COMPLIANCE
The Company's efficient operations are dependent in large part on its
management information systems. Accordingly, if the Year 2000 issue is not
properly addressed both internally and externally, it could result in a material
disruption to the Company's operations. The Company is in the process of
evaluating its management information systems to identify and address Year 2000
issues. The Company's financial, distribution, and merchandising systems are
third party vendor software programs which have been routinely updated through
the years. The Company is currently in the process of such upgrades for each of
these software programs. These upgrades will provide numerous system
enhancements and will be Year 2000 compliant as represented in writing by the
software vendors. The upgrades are expected to be completed by the Company's
fiscal 1999 year-end, January 30, 1999. Based on present information, the
Company believes that these upgrades to the Company's primary information
systems, along with plans to upgrade or modify other less significant systems
will substantially mitigate the risk of a material disruption in the Company's
operations due to internal Year 2000 factors. In order to address external Year
2000 factors, the Company is in the process of communicating with its suppliers
and other outside parties to evaluate their Year 2000 issues and to coordinate
Year 2000 compliance. Based on present information and currently available
resources, the Company plans to have a substantial portion of its Year 2000
issues addressed by the Company's fiscal 1999 year-end, January 30, 1999, and
the Company does not currently anticipate any significant impact on its
financial position or results of operations related thereto.
9
<PAGE>
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
The statements contained in this report that are not purely historical or
which might be considered an opinion or projection concerning the Company or its
business, whether express or implied, are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements may include statements regarding the Company's expectations,
intentions, plans or strategies regarding the future, including statements
related to the Year 2000 issue. All forward-looking statements included in this
document are based upon information available to the Company on the date hereof,
and the Company assumes no obligation to update any such forward-looking
statements. It is important to note that the Company's actual results could
differ materially from those described or implied in such forward-looking
statements because of, among other factors, the ability of the Company to
execute its expansion plans, a shift in demand for the merchandise offered by
the Company, the Company's ability to obtain brand name merchandise at
competitive prices, the effect of regional or national economic conditions and
the effect of competitive pressures from other retailers. In addition, the
reader should consider the risk factors described from time to time in the
Company's other documents and reports, including the factors described under
"Risk Factors" in the Company's Registration Statement on Form S-1, filed with
the Securities and Exchange Commission on October 1, 1997, and any amendments
thereto.
QUARTERLY FLUCTUATIONS
The Company has historically experienced and expects to continue to experience
seasonal fluctuations in its net sales and operating income. The Company's net
sales and operating income are typically higher in the fourth quarter due to
sales increases during the holiday selling season. However, the seasonal
fluctuations are mitigated by the strong product demand in the spring, summer
and back-to-school sales periods. The Company's quarterly results of operations
may also fluctuate significantly as a result of a variety of factors, including
the timing of new store openings, the amount and timing of net sales contributed
by new stores, the level of pre-opening expenses associated with new stores, the
relative proportion of new stores to mature stores, merchandise mix, the
relative proportion of stores represented by each of the Company's three store
concepts and demand for apparel and accessories driven by local interest in
sporting events.
PART II OTHER INFORMATION
ITEM 1: Legal Proceedings
The Company is a party to various legal proceedings incidental to its
business. In the opinion of management, after consultation with legal
counsel, the ultimate liability, if any, with respect to those
proceedings is not presently expected to materially affect the financial
position or results of operations of the Company.
ITEM 2: Changes in Securities
None
ITEM 3: Defaults Upon Senior Securities
None
ITEM 4: Submission of Matters to Vote of Security-Holders
The Company's Annual Meeting of Shareholders was held June 9, 1998.
The following individuals were re-elected to the Board of Directors:
Votes For Votes Withheld
----------- ---------------
Carl Kirkland 6,040,898 7,103
Michael J. Newsome 6,039,994 8,007
Thomas A. Saunders, III 6,039,998 8,003
10
<PAGE>
As Class II directors, Messrs. Kirkland, Newsome and Saunders will serve
until the Annual Meeting of Shareholders to be held in 2001 or until their
successors are elected and qualified.
The 1996 Stock Option Plan was amended to provide for an additional 300,000
shares of common stock to be reserved for future grants of stock options by
the following vote:
For Against Abstain
--------- ------- -------
5,733,168 314,065 768
The Stock Plan for Outside Directors was amended by the following vote:
For Against Abstain
--------- ------- -------
5,816,738 227,032 4,231
Arthur Andersen LLP was approved as the independent public accountants of
the Company for the fiscal year ending January 30, 1999 by the following
vote:
For Against Abstain
--------- ------- -------
6,038,863 8,000 1,138
ITEM 5: Other Information
None
ITEM 6: Exhibits and Reports on Form 8-K
(A) Exhibits
Exhibit # Description
---------- ------------
27 Financial Data Schedule (for SEC use only)
(B) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrants has duly caused this report to be signed on its behalf by the
undersigned duly authorized.
HIBBETT SPORTING GOODS, INC.
Date: September 9, 1998 By: /s/ Susan H. Fitzgibbon
------------------------- ---------------------------
Susan H. Fitzgibbon
Vice President and
Chief Financial Officer
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted from the financial
statements of Hibbett Sporting Goods, Inc. for the interim period ended
August 1, 1998 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JAN-30-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> AUG-01-1998
<CASH> 343
<SECURITIES> 0
<RECEIVABLES> 2,089
<ALLOWANCES> 199
<INVENTORY> 46,231
<CURRENT-ASSETS> 50,835
<PP&E> 26,462
<DEPRECIATION> 11,835
<TOTAL-ASSETS> 66,005
<CURRENT-LIABILITIES> 23,532
<BONDS> 0
0
0
<COMMON> 64
<OTHER-SE> 41,363
<TOTAL-LIABILITY-AND-EQUITY> 66,005
<SALES> 65,845
<TOTAL-REVENUES> 65,845
<CGS> 46,065
<TOTAL-COSTS> 46,065
<OTHER-EXPENSES> 14,631
<LOSS-PROVISION> 19
<INTEREST-EXPENSE> (50)
<INCOME-PRETAX> 5,199
<INCOME-TAX> 1,989
<INCOME-CONTINUING> 3,210
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,210
<EPS-PRIMARY> 0.50<F1>
<EPS-DILUTED> 0.49<F1>
<FN>
<F1>The earnings per share calculations have been prepared in accordance with
SFAS No. 128, and basic and diluted earnings per share have been entered in
place of primary and fully diluted, respectively.
</FN>
</TABLE>
